The news, first reported by the Milwaukee Journal-Sentinel, was made official by the UFC on Wednesday night.
The matchup is a rematch from UFC 169 in February 2014 when Iaquinta won by decision.
The No. 9-ranked Iaquinta (13-4) most recently challenged Khabib Nurmagomedov in April for the UFC's lightweight title. He stepped in on only a few days' notice after both Tony Ferguson and Max Holloway could not compete due to injury and being deemed unfit to fight. Nurmagomedov won by unanimous decision to win the belt. Iaquinta won his previous five bouts.
Lee (17-3), ranked No. 5 in the division, has won six of his last seven fights. In April he dominated Brazilian striker Edson Barboza, winning by TKO in the fifth round in Atlantic City.